The wheel has come full circle for Mr Troy who previously headed Principal Hotels when it owned the Palace, before he sold off the group in a £258m deal.

Now he has re-launched Principal to operate five of its former properties, part of the troubled Le Meridien group, after taking over their leases from the Royal Bank of Scotland, who remain the owners.

Financial details, and the length of the leases have not been disclosed, but a spokeswoman said today that he was "over the moon" to have the hotels back.

And the deal will bring a fresh sparkle to the Palace, which will retain its name, and along with the other four will undergo a multi-million pound re-furbishment.

In 1994, Mr Troy headed a management buyout of Principal Hotels for £68m.

In 2001 he sold what was by then a chain of 18 hotels, including two in Europe, to the Japanese Bank Nomura for £258m. It then became part of the Le Meridien group, of which he was former UK and Ireland Managing Director.

Le Meridien has faced an uncertain future for months after hitting financial difficulties, which led to it being split up. Two of its top London hotels - the Grosvenor House and the Waldorf, having been taken over by Marriott and the Hilton group, respectively.

But Mr Troy had left the group by the time of the difficulties.

Future

Another Manchester hotel in the Le Meridien group the Victoria and Albert, is also owned by RBS, but its future has still to be settled. A number of parties, including the Marriott group are said to be interested in taking it over.

Mr Troy has revived Principal to operate in the upper four star market, with a strong focus on the conference sector.

The Palace, which dominates the corner of Oxford Road and Whitworth Street, is in the Italianate terracotta building that was the opulent HQ of what was formerly the Refuge Assurance Company.

Designed on a three-acre site by architect Alfred Waterhouse, who also designed Manchester Town Hall, it has 252 bedrooms, 12 conference and meeting rooms and a ballroom which can accommodate more than 1,000 guests.

Principal will also operate the Hotel Russell, London; Hotel Metropole, Leeds; Royal York Hotel and the Selsdon Part Hotel and Golf Course in South Croydon.

Between them the hotels have more than 1,100 bedrooms and can accommodate 6,000 conference delegates.

A spokeswoman for the group said: "Mr Troy took a struggling company and turned it around very successfully, selling it for nearly £260m. We know what these hotels are capable of, and he is keen to repeat his success with them."